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Update No: 048 - (26/04/07)

April was a busy month regarding North Korea, although ironically some of this bustle focused on inaction rather than action. The key deadline of April 14 for closure of the Yongbyon nuclear site was missed, but the sky did not fall in. All concerned in effect gave Pyongyang more leeway, recognizing that the US for its part has also been late in its side of the deal: namely to get US$25 million of DPRK funds released from Banco Delta Asia (BDA), a small Macau bank sanctioned by the US. As of April 25 these monies are awaiting collection, but North Korea has yet to move. If it delays much longer, patience will be stretched. But George Bush now wants a deal – and no one wants a Korean crisis.

Domestically too the calendar is always busy, with three major events. ‘Sun’s Day’ on April 15 is the birthday – 95 this year – of North Korea’s founding leader, the late Kim Il-sung; who remains ‘eternal president’ despite having been dead since 1994. This is marked by an arts festival and the like. A steelier note followed soon after: April 25 was army day, with a big military parade. On top of these, the annual spring meeting of what passes for a parliament in North Korea, which used to be held in March, has now settled on April 11 for the third successive year. As usual, delegates took just a day to consider and pass a budget with no numbers. This year they also approved a new prime minister.

The DPRK misses a key deadline
As of late April, the landmark first-phase nuclear deal agreed at the six-party talks in February was in limbo. Although five new working groups had met as scheduled (see last month’s Update), the key deadline of April 14 for North Korea to shut its main nuclear site at Yongbyon passed unmet. No one was surprised or even much fazed, since it was recognized that for its part the US had been a month late in fulfilling what in effect was Pyongyang’s precondition, albeit not formally part of the February 13 six-party accord.

The BDA knot proves hard to unravel
This, of course, was to resolve the BDA issue (for background, see last month’s Update), which proved far knottier than anyone expected. The details are complex and obscure; but it seems that because BDA remains sanctioned by the US Treasury Dept, other banks (notably in China) refused to deal with it – even to accept transfers – lest this tarnish their own reputation. Not until April 11 did the US say a solution had been found; but North Korea, while reaffirming its commitment to the February accord, claimed still not to be sure and made no effort to collect its cash. (It still remains unclear exactly how this will be effected: DPRK officials are thought reluctant to come and cart off large sums in cash or bullion, with the world’s “reptile press” – a favourite phrase – snapping away. 

Delay will undermine US doves
If this all drags on into May, it risks undermining those in Washington who have gone out on a limb for their belief that a deal can be done with Kim Jong-il. For now, the chief US negotiator, assistant secretary of state Christopher Hill, has the confidence of the secretary of state Condoleezza Rice, and thus of President Bush. But with hawks howling that this was a lousy deal, any prolonged Pyongyang prevarication could backfire. The fear is that the dear leader knows just how weak the embattled Bush’s political position is, and sees no reason to deny himself the pleasure of watching a superpower sweat.

Seoul seeks sunshine, regardless
The missed April 14 deadline matters less in Seoul. South Korea, quick to resume its ‘sunshine’ policy after February’s six-party accord, continued in that vein regardless.

Here the main event was economic talks – strictly, the 13th meeting of the Economic Cooperation Promotion Committee (ECPC) – held in Pyongyang on April 18-22. North Korea chose to play up: the start was delayed for most of the day after an unprecedented demand by the hosts to see drafts of not only the final joint statement – it is revealing that the South had already prepared this – but the South’s keynote speech. The North also sought a commitment in advance to rice aid, but South Korea was unyielding on all of this. Later the North’s chief delegate, Chu Dong-chan, stormed out after the South tried to link rice aid to compliance with February’s six-party nuclear agreement (see below).

Test cross-border trains may run in May, the KPA permitting
Despite such histrionics and a final session lasting into the small hours, an agreement was duly reached. Its ten points cover familiar ground, reflecting North Korea’s reluctance to implement matters supposedly agreed already. A prime case are the two cross-border rail tracks, near the west (Gyeongui) and east (Donghae) coasts. New roads in each corridor opened in 2005 to regular if one-way traffic, taking Southern managers et al. to the North’s Kaesong industrial park and tourists to the Mount Kumgang resort respectively. 

Transports of delight are premature
Yet the parallel relinked railway lines languish unused. Test runs set for May 2006 were abruptly cancelled by the North. These have now been rescheduled for May 17, subject to further talks due in Kaesong on April 27-28 and a military guarantee. The North’s cold feet belong to the Korean People’s Army (KPA), which looks askance at its heavily defended front line becoming even slightly a front door. Similarly, the South made little headway in pressing for more aid to be sent overland, rather than expensively by ship as at present. So it is not yet certain whether trains will roll on May 17; or even if they do, that this will prove a swift harbinger of regular inter-Korean services. Boarding a train in Seoul or Pusan for Pyongyang, or indeed Beijing, may still be some years down the line.

Food aid will resume, quasi-unconditionally
In a partial concession, 50,000 of the 400,000 tons of rice that South Korea has agreed to send will go by land; albeit by road rather than rail. But the greater concession is the South’s, in resuming this aid – notionally a loan, but no one expects it to be repaid – suspended last year after the North’s missile and nuclear tests. The timing of the ECPC talks was deliberate: the North wanted to meet sooner, but the South insisted on waiting until after the April 14 deadline. For this reason an earlier joint statement in March after ministerial talks did not mention aid, although North Korea apparently asked for 400,000 tons of rice and 300,000 tons of fertilizer, as it has received in most recent years till 2006.

In March the North repeated its call for fertilizer, now needed quite urgently as the rice planting season approaches. The South responded with alacrity: deliveries began before the month’s end. By early April Seoul sounded ready to delink rice aid too from nuclear compliance, although it still seems to be havering. The ECPC agreement attaches no formal conditions, but the South’s chief delegate, vice finance minister Chin Dong-soo, later stressed that rice delivery will depend on the North’s closing Yongbyon; we shall see. The first batch is due to be sent in late May. Before last year’s suspension of food aid, South Korea had sent a cumulative total of 2 million tons of rice to the North.

“Soap for minerals” deal is reiterated
Also agreed, or rather re-affirmed in a “revised and complemented” form, was a rather odd deal whereby the South will provide raw materials worth US$80 million (again notionally as a loan) for very basic consumer goods like clothing and soap, in exchange for vague mineral rights. First mooted nearly two years ago at the 10th ECPC meeting in July 2005, here it was South Korea which attached conditionality: no train runs, no soap. 

Subject to that hurdle and more talks in Kaesong on May 2, the South will start sending raw materials in June – when it also expects site visits to the North’s mines. South Korea has strategic as well as economic reasons to covet Northern minerals, since it fears that China – busy cutting resource deals in North Korea – may otherwise gobble up the lot.

Intriguingly, a separate clause envisages joint resource development in third countries, to be discussed in talks at Kaesong in June. Perhaps they have Siberia in mind; with South Korea putting up capital, management and technology while the North supplies labour.

River, sand and fishing remain to be sorted
Several further items in the April 22 agreement had been agreed before, but not yet implemented. One hardy perennial, going back several years, is proposed cooperation to prevent flooding on the Imjin river, which flows from North to South. Now a document is due to be exchanged in May, with site visits in the North to follow. We live in hope.

Similarly, a meeting at Kaesong in June will endeavour to make concrete a range of prior outline agreements: preventing natural disasters, cooperation in science and technology and in fisheries, committees for business arbitration and immigration, and more. Before that, separate talks as soon as possible will try to implement a plan to extract sand jointly from the Han River estuary: a border area, so here again military guarantees are needed.

Premier Pak gets the sack
The Supreme People’s Assembly (SPA), North Korea’s rubber-stamp parliament, met as usual for a single day on April 11. Kim Jong-il was present, as he had not been last year, along with 593 of the large 687-strong assembly; it is unclear why, not unusually almost 100 were missing. The SPA heard an economic report, reviewed the budget – and sacked the prime minister, Pak Pong-ju, a technocrat only appointed in September 2003. 

In his previous post as chemical industry minister, Pak made a good impression when he visited Seoul on an economic mission in 2002. Why he has been fired now is unclear. Theories include failing to kick-start economic growth, listening too keenly to China, and diverting funds intended for oil to the hard-pressed farm sector. Either way he may have fallen foul of the military, whose say is decisive under the Songun (army-first) policy.

Transports of delight, not
Unusually, the official Korean Central News Agency (KCNA) gave brief details on the new man in the hot seat: Kim Yong-il, hitherto a long-serving minister of transport. Born in 1944, Kim served for nine years in the army before graduating as a marine navigation officer. He then spent three years as a three-revolution team member. Akin to China’s Cultural Revolution, this was a movement where youth were sent to ginger up factories and farms; it was also how Kim Jong-il built his power base. Thereafter Kim worked as a bureaucrat in the ministry of marine and land transport, becoming minister in 1994.

Both this long service and Kim’s elevation now are interesting. Transport is hardly a success story in North Korea, whose road and rail networks are decrepit in the extreme. Kim’s promotion may signal a long overdue new prioritisation of this area. In Seoul it raised some hopes that two relinked cross-border railway lines may finally be put to use.

Though described as a technocrat, Kim’s military and marine background are worthy of note. As graphically revealed in the Pong Su case in Australia last year (see Update for March 2006), North Korea’s merchant fleet plays a key role in undercover as well as legitimate trade. While an Australian jury surprisingly acquitted the Pong Su’s captain and crew of knowing about the heroin she carried, the ship itself was forfeited and destroyed. This too seems an ambiguous background for Kim Yong-il’s promotion now.

A budget with no numbers (is a poor joke)
As usual the SPA’s main business was to hear an economic report and review the budgets for this year and last. These occasions follow a predictable and (for an analyst) frustrating pattern. Although this is the only fixed time when North Korea officially reports on its economy, the way it does this is so opaque that neither data nor trends are easy to discern. 

To start with, for a fifth successive year this was a budget without a single real number, only the odd percentage. Until 2002 North Korea did give overall figures for revenue and spending, from which these percentages could be used to calculate a more detailed partial breakdown. This ceased in 2003, presumably because the de facto inflation since July 2002’s wage and price reforms makes a multiplier for before and after this watershed either technically hard to calculate or simply embarrassing to admit. Either way, a budget without numbers is a poor joke, showing the limits of North Korea’s reform effort thus far. (South Korean sources, apparently working from a stray figure in a radio broadcast last year, reckon this year’s Northern budget is set at about 433.3 billion DPRK won, or US$ 3.09 billion at the official rate of exchange of 141 to the dollar.)

Besides being numberless, the budget report was so bland as to be hardly worth covering in any detail; it can be read at www.kcna.co.jp/item/2007/200704/news04/12.htm#1 The only figure which stood out was a large hike – 60%, but of what? – in planned spending on science and technology. Beyond that, so many sectors – agriculture, consumer goods, and four domains of heavy industry – were designated as “priorities” that in effect none of them can be; especially in an economy so starved of resources as this. Much of what was said involved simply trying to make things work properly: solve food and housing problems, make more and better consumer goods, repair power plants, and so on.

Army day is celebrated
Compared to these economic niceties (or failures), brandishing weapons is a doddle for a state which, as usual, celebrated Army Day on April 25. This was a specially auspicious year, being the 75th anniversary of the Korean People’s Army (KPA)’s claimed founding in 1932. In fact this is a fiction: the real date was February 8, 1948, the year the DPRK itself was founded. But in 1978 Kim Il-sung had it changed: to obscure his Soviet origins, and create a putative link to an earlier guerrilla band he was involved with in Manchuria.

Besides all manner of meetings, the high point of the celebrations was a military parade which took 90 minutes to pass through Kim Il-sung Square. Weapons on display included 48 missiles of four different kinds according to the official Korean Central News Agency (KCNA). Kim Jong-il was on hand, and waved to the crowds for several minutes.

Rhetoric is as robust as ever
While on this of all days militant rhetoric is to be expected, its tone was hardly that of a state which just weeks before signed an agreement supposed to lead to disarmament and peace. Rodong Sinmun, the daily paper of the ruling Workers’ Party of Korea (WPK), thundered that “in order to protect the sovereignty and independence it is necessary to counter the military hegemony of the U.S. imperialists by force of arms… The aggressive and predatory nature of the imperialists will remain unchanged as long as they are alive. If a country and nation make a concession to invaders, they will allow their sovereignty and right to existence to be wantonly violated.” By contrast, “a rosy future is in store for the people, who though not fed well (sic), give priority to the development of the defence industry, build their army into a strong one and convert their whole country into an impregnable fortress in order to guarantee the existence and prosperity of the nation.” 

Senior soldier sick?
Good Friends, a usually well-informed South Korean human rights NGO, claimed on April 24 that North Korea’s most powerful military figure, vice marshal Jo Myong-rok, is critically ill with kidney and liver disease – with at most two months to live. Aged 77, Jo has been ill for some years, having reportedly been treated for kidney problems in Beijing four times during 2001-04. Since last August he had only made three public appearances. In 2000 Jo as Kim Jong-il’s special envoy was the most senior DPRK official ever to visit the US; he took tea in the White House with Bill Clinton, in full KPA uniform.

If indeed Jo’s illness is now terminal, this may explain recent military personnel changes. April’s SPA meeting appointed Kim Yong-chun, the KPA chief of staff, as vice-chairman of the National Defence Commission (NDC): the supreme executive body, outranking the Cabinet. Then again, one vice-chairmanship was already vacant since the death of former premier Yon Hyong-muk, a rare civilian on the NDC, in October 2005. If Good Friends is correct, there may soon be another vacancy. Separately, Korea Central Broadcasting Station (KCBS) reported on April 14 that 55 generals had been promoted.

WFP warns that the fight against hunger is “losing ground”
The UN World Food Programme (WFP), which in the late 1990s had its largest operation worldwide in North Korea, warned in March that the country faces a new food crisis. Its Asia director, Tony Banbury, said on March 27 that a combination of worse harvests (due in part to floods last summer) and reduced international aid meant that “we are losing ground in the struggle against hunger in the DPRK”, which faces a shortfall of a million tonnes of food grains this year: about a fifth of its total need. Spring is always the crunch point, as last autumn’s harvest runs out before the new year’s first crops are ready.

This problem is of North Korea’s own making. From 2006 it curtailed WFP, which since 1995 had supplied 4 million tons of food worth US$1.7 billion, asking the agency to shift from humanitarian to development aid – which is harder to fund. Kim Jong-il was apparently confident that food from South Korea and China – who unlike WFP demand little or no monitoring – would fill the gap. In fact both these donors have cut back, the former as a riposte to the North’s missile and nuclear tests last year. WFP duly slashed its programme from aiding 6 million of the most vulnerable – mainly children and the elderly – to just 1.9 million; but in fact it is only reaching 700,000, due to lack of funding.

The regime may now be having second thoughts. On a recent visit, where he met the vice minister of agriculture and spent three days in the field, Mr Banbury detected “a new openness to receiving increased food assistance”. For the first time WFP was allowed to spot-check a grain warehouse, and found all in order; there are persistent claims that food aid is diverted to the military or sold on the black market. But with only 20% of WFP’s current appeal for US$102 million so far funded, North Korea’s new readiness to receive may not necessarily translate into a reciprocal willingness by donors to give. South Korea’s recent agreement on April 22 to resume its usual 400,000 tonnes of rice aid, having missed last year, will be a big help; although at least in theory it is contingent on North Korea fully implementing February’s six-party nuclear agreement.

WFP confirmed that for both food and health conditions remain grim. According to Mr Banbury, “having enough to eat is still a daily struggle for one-third to one-half of all North Koreans,” and women and children seen in the street look “thin and hungry.” A paediatric hospital, boarding school and orphanages which he visted all had malnourished children, some severely so – as local officials frankly admitted. Overall, WFP fears that hard-won progress in diet and health over the past decade risks being reversed.

International aid vaccinates 16 million against measles
In a rare case of good news on the health front, the International Federation of the Red Cross (IFRC) revealed on April 20 that 16 million North Korean adults and children – almost the entire population under the age of 45 – were immunized against measles in just two months: one of the world’s fastest ever responses. IFRC, WHO and Unicef organised this, having been asked for help on February 15 after four deaths and 3,600 cases of infection since November. Vaccines and syringes cost a modest US $6million; North Korea spent another $2.5 million on logistics. In a sign of the regime’s still tight organisational capacity, 15,000 Red Cross volunteers were mobilised to visit households and explain why immunization was necessary. All 16 million got a shot of vitamin A too, to boost their immune systems; this is also essential for child growth and development. 

A population weakened by malnutrition has seen regular epidemics in the past decade, as well as the return of previously controlled diseases like tuberculosis. The harsh winter is an especially vulnerable time. Last October saw the first outbreak of scarlet fever around Hyesan, which abuts China, since 1945. Quarantines were imposed, and South Korean NGOs sent medicine worth US$400,000 (later reimbursed by the government in Seoul).

Measles too was last seen in North Korea in 1992, so this time it was at first mistaken for rubella. The epidemic broke out in 30 counties in all ten of North Korea’s provinces, with densely populated areas (presumably cities) and youth worst affected. 40% of all cases were among 11-19 year olds: the age cohort which missed out, during the 1990s’ famine and public health crisis, on what previously and subsequently was routine vaccination.

Foot and mouth is swiftly contained
Swift international aid also contained North Korea’s first outbreak of foot and mouth disease since 1960, in March. Apparently a single case on a farm near Pyongyang, brought in by livestock imports, this led to the culling of 466 infected cattle and 2,630 pigs. South Korea, where foot and mouth outbreaks in 2000 and 2002 led to 162,000 pigs being slaughtered, promptly sent medicines and equipment worth US$300,000. On April 4 the UN Food and Agriculture Organization (FAO), after visiting the affected area, concluded that this was a one-off case with little risk of a recurrence. FAO praised North Korea’s veterinary authorities as “very transparent and cooperative.”

Diplomats refuse to send their children home
In a rare instance of revolt, North Korean diplomats are said to be refusing an edict to send their children home. According to reports in the Seoul press, they were ordered to do so by end-March, being allowed to keep just one child aged 11-13 overseas. But only a few dozen have returned, rather than the 3-4,000 expected – including not a single child from China, whither a vice foreign minister was sent to impose order. Parents complained of insufficient time to prepare, and that education would be disrupted. The deadline was reportedly extended to end-April, so it remains to be seen if this defiance will continue

Foreign journalists note contrasts
Foreign journalists allowed to visit in April, for the celebrations marking Kim Il-sung’s birthday, noted the contrast between the spruced-up showpiece capital, Pyongyang, and elsewhere. The Financial Times reported that “in the crumbling rural villages south of Pyongyang, boys in tatty army uniforms walk narrow, pot-holed dirt roads past women washing clothes in streams or tilling crops by hand, or occasionally with an ox and cart. The houses, of home-made mud bricks, appear to have no electricity or running water.”

By contrast, in the capital a new middle class sports fake Burberry coats and other labels. Sofas are sold on street corners for US$80, over three years’ average wage. Street traders are also seen in the countryside. Bicycles are more prevalent, but curiously women are banned from cycling in Pyongyang – allegedly for causing too many accidents. That is just one peculiarity of what is surely the world’s most peculiar regime, which despite February’s six-party accord remains as feisty, unbiddable and unpredictable as ever.

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